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ICE implements new enforcement tool using the Social Security Administration’s “no-match” letters

Immigration and Customs Enforcement (ICE) published final regulations describing an employer’s legal obligations upon receiving a letter from the Social Security Administration (SSA) stating the information submitted for an employee does not match an SSA record (commonly known as a SSA “No-Match” Letter). The final regulations were supposed to have become effective on September 14, 2007. However, a court has issued a temporary restraining order delaying the effective date until it can consider a lawsuit challenging the new regulation. The court will be hearing arguments on this lawsuit in early October. A ruling on the lawsuit is not expected until at least the end of October. Therefore, if the court upholds the regulation, the earliest date on which the regulation would become effective would most likely be the end of October.

Employers are required to report wages annually for each employee on Form W-2 Wage and Tax Statements. The SSA processes these wage reports to determine eligibility for SSA benefits. After the SSA processes the wage report submitted by employers, the SSA attempts to resolve items that cannot be matched by sending letters to employees, employers and self-employed individuals to inform them when a reported name or Social Security Number (SSN) does not match the SSA’s records. The purpose of these “No-Match” letters is to obtain corrected information to help the SSA identify the individuals to whom the earnings belong so that the earnings can be posted to the individual’s earning record. “No-Match” letters fall into two categories: 1) employer “No-Match” letters; and 2) “No- Match” letters sent to workers whose earnings cannot be credited to SSA records.

The SSA will first send notices to workers whose names and SSNs did not match SSAs records. Approximately two weeks after the SSA sends the worker’s notices, the SSA then sends “No-Match” letters to employers. Under current SSA procedures, these “No-Match” letters are sent to any employer who reported more than ten no-matches that represented more than .5% of the W-2s submitted by the employer. The “No-Match” letter to employers advises the employers of the “no-matches” and asks them for corrected information. The final regulations released by ICE applies only to “No-Match” letters sent to employers. The regulations do not apply to notices sent to workers.

The SSA has indicated that it will be sending out worker’s notices for the last tax year in early September 2007. Subsequent to these worker’s notices being sent, the SSA will then send “No-Match” letters to employers. However, it is unknown at this time if the SSA is going to delay sending the “No Match” Letters for the last tax year until a court issues a ruling on the lawsuit discussed above. In the order temporarily enjoining enforcement of the ICE regulation, the court also prohibited the SSA from sending the “No Match” Letters with a letter from ICE explaining the implementation of the new regulations. Therefore, the SSA may delay the release of the “No Match” Letters in order to avoid having to send out a subsequent letter explaining the new ICE regulation if the court allows ICE to implement the final regulation. Additional information about the pending lawsuit will be contained in our firm’s future weekly website Immigration Updates when it becomes available.

When the SSA sends the “No Match” Letters for the last tax year, it has indicated that it will be sending letters to 138,447 employers throughout the United States. As previously indicated, each of these letters will contain at least ten worker mismatches with the SSA records. However, some letters may contain 500+ mismatches. Employers in the state of California will receive the most “No-Match” letters in the nation. Employers in the state of Illinois will receive the fourth largest number of “No-Match” letters, approximately 7,000.

In the final regulations, ICE is converting the “No-Match” letter into a new immigration enforcement tool by considering in an enforcement action the receipt of a “No-Match” letter by an employer as evidence that the employer has “constructive knowledge” that an employee is unauthorized to work in the United States. However, in the final regulation, ICE provides a “safe harbor” provision from a potential enforcement action if the employee is later found not to have authorization to work legally in the United States. The final regulation sets forth the “reasonable steps” an employer should take when it receives a “No-Match” letter from the SSA in order to avail itself of the “safe harbor” provisions:

1) Within 30 days of receipt of the “No-Match” letter:

An employer should promptly check its records to ensure that the discrepancy or “No-Match” is not a result from a typographical or clerical error.

If there is an error, the employer should correct the data with the appropriate agency (SSA or Department of Homeland of Security (DHS)) and should verify the corrected data with the relevant agency.

If the discrepancy cannot be resolved, the employer should promptly request the employee to confirm the name and Social Security account number in the employer’s records.

If the employee corrects the information the employer must take the proper steps to notify the appropriate agency (SSA or DHS) and to verify the corrected data with the relevant agency.

If the employee states that the information is correct, the reasonable employer would advise the employee to visit the relevant agency to correct the information.

ICE considers that a “No-Match” has been resolved only when the employer verifies with the appropriate agency (SSA or DHS) that the information corresponds with the proper agency’s records.

2) Within 90 days of receipt of the “No-Match” letter.

If the discrepancy is not resolved within 90 days of receipt of the “No-Match” letter, the employer should re-verify the individual’s work authorization by completing a new Form I-9 for the employee without using the documents that were subject to the “No-Match” letter. The employer only has an additional three days to complete the new Form I-9.

An employee cannot use a document containing the SSN or Alien Number that is subject of the “No- Match” letter to establish work authorization or identity, or both. Additionally, at this stage, all documents used to prove identity or both identity an employment authorization must be contain a photograph.

If at the end of this process, the employee’s employment authorization cannot be verified and the employee is unable to resolve the “No-Match” using these procedures, the employer risks liability for violating the law prohibiting knowingly employing unauthorized workers. The final regulations remind employers that a “No-Match” letter does not, in and of itself, indicate that a worker is unauthorized to work in the United States but also states that an employer’s failure to follow the “reasonable steps” outlined above could subject the employer to possible civil and criminal penalties. This procedure also applies if an employer receives notice from ICE that an immigration document establishing employment authorization presented by the employee does not match Department of Homeland Security (DHS) records (commonly referred to as a “Notice of Suspected Document”).

The final regulations emphasize that during an audit, the ultimate determination of whether an employer will be found to have knowingly employed an unauthorized alien will be based on the “totality of the circumstances.” If an employer follows the “safe harbor” provisions but other independent evidence exists to prove that an employer had constructive knowledge of an employee’s lack of authorization to work legally in the United States (e.g. an employer’s sponsorship of an employee for a labor certification or visa petition), the employer may still face civil and criminal liability based upon a “totality of the circumstances.” Also, the “safe harbor” provision does not protect employers that have “actual knowledge” of unauthorized employment. (Please note that it appears that the U.S. Department of Labor (DOL) is sharing information provided by employers in the temporary and permanent labor certification programs with ICE.)

In the final regulations, ICE reminds employers these procedures are to be applied uniformly to all of their employees having unresolved “No-Matches.” If an employer selectively applies these procedures to certain employees, the employer may be subjecting itself to liability under applicable anti-discrimination laws. Courts have consistently held that an employer’s shifting inconsistent reasons for termination and/or adverse employment actions can provide a basis for a potential discrimination action by the affected employee(s). Therefore, prior to implementing these procedures, employers should contact our firm’s Employment & Labor Group and Immigration Group to establish uniform company-wide policies to implement the provisions contained in this final regulation so that the procedures comport with all applicable employment and immigration laws. If an employer does not properly follow the final regulations, the employer (and its owners and/or managers) may be subjecting themselves to both criminal and civil liability under applicable employment and immigration laws.

Additional information about the government’s implementation of this final regulation and the outcome of the lawsuit challenging this final regulation will be contained in our firm’s future Immigration Updates when it becomes available.

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